B2Gold Reports Strong Fourth Quarter and Full-Year 2020 Results; Annual Records for 2020 Gold Production, Gold Revenues and Operating Cash Flows; Declares 2021 First Quarter Dividend of $0.04 per Share

By Benzinga3 days ago

VANCOUVER, BC, February 23, 2021 /PRNewswire/ - B2Gold Corp. (TSX:BTO) (NYSE:BTG) (NSX: B2G) (“B2Gold“ or the “Company“) is pleased to announce its operational and financial results for the fourth quarter and full-year ending December 31, 2020. The Company previously released its gold production and gold revenue results for the fourth quarter and full-year 2020, in addition to its production and budget guidance for 2021. In 2021, the Company is forecasting total gold production of between 970,000 and 1,030,000 ounces. All dollar figures are in United States dollars unless otherwise indicated.

2020 Fourth Quarter Highlights

  • Total gold production of 270,469 ounces (including 14,150 ounces of attributable production from Calibre Mining Corp. (“Calibre“)) and consolidated gold production of 256,319 ounces from the Company's three operating mines
  • Consolidated gold revenues of $480 million, a significant increase of $166 million (53%) over the fourth quarter of 2019 (excluding revenues from discontinued operations)
  • Consolidated cash flow provided by operating activities of $197 million, an increase of $52 million (36%) over the fourth quarter of 2019 (and is net of a voluntary tax installment payment of $50 million made in December 2020 related to the Fekola Mine's 2020 tax obligations)
  • Total consolidated cash operating costs (see “Non-IFRS Measures“) of $473 per ounce produced ($461 per ounce sold); total consolidated all-in sustaining costs (“AISC“) (see “Non-IFRS Measures“) of $926 per ounce sold (including the Company's estimated attributable share of Calibre's results)
  • Net income attributable to the shareholders of the Company of $168 million ($0.16 per share); adjusted net income (see “Non-IFRS Measures“) attributable to the shareholders of the Company of $147 million ($0.14 per share)

2020 Full-Year Highlights

  • Record annual total gold production of 1,040,737 ounces (including 45,479 ounces of attributable production from Calibre), at the upper end of the guidance range (of between 1,000,000 – 1,055,000 ounces)
  • Record annual consolidated gold production from the Company's three operating mines of 995,258 ounces, at the upper end of the guidance range (of between 955,000 – 1,005,000 ounces), and significantly higher by 17% (144,142 ounces) over 2019 (excluding discontinued operations), marking the twelfth consecutive year of record annual consolidated gold production
  • Record annual consolidated gold revenues of $1.79 billion, a significant increase of $0.63 billion (55%) over 2019 (excluding revenues from discontinued operations)
  • Record annual consolidated cash flow provided by operating activities of $951 million, a significant increase of $459 million (93%) over 2019
  • Total consolidated cash operating costs (including the Company's estimated attributable share of Calibre's results) of $423 per ounce produced ($422 per ounce sold), near the low end of the Company's guidance range (of between $415 - $455 per ounce), and total consolidated AISC of $788 per ounce sold, near the low end of the guidance range (of between $780 - $820 per ounce sold)
  • Net income of $672 million (including a net impairment reversal for the Masbate Mine of $122 million); net income attributable to the shareholders of the Company of $628 million ($0.60 per share); adjusted net income attributable to the shareholders of the Company of $515 million ($0.49 per share)
  • B2Gold maintains a strong financial position and liquidity with cash and cash equivalents of $480 million at December 31, 2020; during the third quarter of 2020, the Company fully repaid the outstanding Revolving Credit Facility (“RCF“) balance of $425 million with the full amount of the $600 million RCF now undrawn and available
  • B2Gold's quarterly dividend rate was increased in the third quarter of 2020 by 100% to $0.04 per common share (or an annualized rate of $0.16 per common share), one of the highest dividend yields in the gold sector
  • For 2021, B2Gold remains well positioned for continued strong operational and financial performance with total production guidance of between 970,000 - 1,030,000 ounces of gold (including attributable ounces projected from Calibre of between 50,000 - 60,000 ounces) with total consolidated forecast cash operating costs of between $500 - $540 per ounce and total consolidated AISC of between $870 - $910 per ounce; consolidated cash operating costs and AISC per ounce are forecast to be higher than 2020, mainly due to the planned lower production and higher planned stripping activities at Fekola, higher forecast fuel and labour costs in Mali, and the drawdown of ore stockpiles at Otjikoto
  • Following a very successful year for exploration in 2020, B2Gold is planning a year of aggressive exploration in 2021 with a budget of approximately $66 million (excluding Gramalote), including a record $25 million allocated to high quality targets for the Company's ongoing grassroots exploration programs

Despite some of the challenges that the current COVID-19 pandemic has created worldwide and in each of the locations where the Company operates or is head-quartered, the Company continues to operate virtually unimpeded. The B2Gold executive team is very proud of the Company's employees' dedication and resilience in these challenging times and believe it is in part due to the executive team's and mine management's years of experience in all aspects of international mining, and the Company's culture of treating all its stakeholders with fairness, respect and transparency. This successful approach is reflected again in the Company's record performance in 2020.

The Company continues to address the COVID-19 pandemic and minimize its potential impact at B2Gold's operations. B2Gold places the safety and well-being of its workforce and all stakeholders as its highest priority and continues to encourage input from all its stakeholders as the COVID-19 situation evolves. The Company continues to implement measures and precautionary steps to manage and respond to the risks associated with COVID-19 to ensure the safety of B2Gold's employees, contractors, suppliers and surrounding communities where the Company works while continuing to operate. The Company is continually updating these plans and response measures based on the safety and well-being of its workforce, the severity of the pandemic in areas where it operates, global response measures, government restrictions and extensive community consultation. The Company is working closely with national and local authorities, including labour unions, and continues to closely monitor each site's situation, including public and employee sentiment to ensure that stakeholders are in alignment with continued safe operation of its mines.

2020 Full-Year and Fourth Quarter Operational Results and Development

Despite the challenges of the COVID-19 pandemic, B2Gold had another remarkable year of strong growth in 2020, with the achievement of B2Gold's twelfth consecutive year of record annual gold production. The Company's total gold production for 2020 was an annual record of 1,040,737 ounces (including 45,479 ounces of attributable production from Calibre), at the upper end of the guidance range (of between 1,000,000 – 1,055,000 ounces). Consolidated gold production from the Company's three operating mines was an annual record of 995,258 ounces of gold, at the upper end of the guidance range (of between 955,000 – 1,005,000 ounces), and significantly higher by 17% (144,142 ounces) than 2019 (excluding discontinued operations). The significant increase in gold production over 2019 was driven by the Fekola Mine in Mali, which produced an annual record of 622,518 ounces of gold, exceeding the upper end of its guidance range (of between 590,000 - 620,000 ounces). Between the commencement of Fekola's operations in September 2017 and December 31, 2020, the Fekola Mine has produced over 1.6 million ounces of gold (which is 155,000 ounces more than originally forecast under Fekola's Definitive Feasibility Study over this period). The Masbate Mine in the Philippines achieved another strong year in 2020, producing 204,699 ounces of gold, at the midpoint of its guidance range (of between 200,000 - 210,000 ounces). Masbate's strong operational performance was achieved despite a five-day temporary suspension of mining activities in the first quarter of 2020 due to fuel shortages relating to COVID-19 restrictions, and a magnitude 6.6 earthquake approximately 90 kilometres from the mine site on August 18, 2020, suspending mining and processing operations for five and six days, respectively, as inspections were conducted to confirm there was no damage to the mine from the earthquake. The Otjikoto Mine in Namibia also had another solid year in 2020, producing 168,041 ounces of gold, near the midpoint of its guidance range (of between 165,000 - 175,000 ounces).

The Company's full-year 2020 total consolidated cash operating costs (including the Company's estimated attributable share of Calibre's results) were $423 per ounce produced ($422 per ounce sold), near the low end of its guidance range (of between $415 - $455 per ounce), and 17% lower ($89 per ounce produced) compared to 2019. Consolidated cash operating costs from the Company's three operating mines were $406 per ounce produced ($405 per ounce sold). Lower fuel costs, a weaker Namibian dollar and changes to mine sequencing as a result of responding to COVID-19 challenges were the primary reasons for the cash operating costs per ounce being lower than both budget and 2019. In the fourth quarter of 2020, the Company's total consolidated cash operating costs (including the Company's estimated attributable share of Calibre's results) were $473 per ounce produced ($461 per ounce sold) and consolidated cash operating costs from the Company's three operating mines were $458 per ounce produced ($446 per ounce sold). The consolidated cash operating costs per ounce for the fourth quarter of 2020 were higher than budgeted, mainly due to higher than budgeted costs at the Fekola Mine, including higher heavy fuel oil (“HFO“) prices, higher labor costs due to COVID-19 and mining sequence changes.

The Company's full-year 2020 total consolidated AISC (including the Company's estimated attributable share of Calibre's results) were $788 per gold ounce sold (full-year 2019 - $862 per gold ounce sold), near the low end of its guidance range (of between $780 - $820 per ounce sold). Consolidated AISC from the Company's three operating mines were $774 per ounce sold. AISC were near the low-end of the guidance range, as a result of lower than budgeted cash operating costs, higher than budgeted gold ounces sold, lower general and administrative costs and lower than budgeted sustaining capital expenditures ($24 million), partially offset by increased royalties as a result of higher gold prices. In the fourth quarter of 2020, the Company's total consolidated AISC (including the Company's estimated attributable share of Calibre's results) were $926 per ounce sold and consolidated AISC from the Company's three operating mines were $917 per ounce sold. As expected, consolidated AISC for the fourth quarter of 2020 were higher than budget due to the expected catch up on budgeted sustaining capital that had been delayed from earlier quarters of 2020, higher than budgeted cash operating costs and increased royalties as a result of higher gold prices.

The Company's expansion and development projects also progressed well throughout 2020:

  • At Fekola, successful commissioning of the Fekola mill expansion to 7.5 million tonnes per annum (“Mtpa“) (an increase of 1.5 Mtpa from an assumed base rate of 6 Mtpa), occurred on September 10, 2020, several weeks ahead of the scheduled completion date of September 30, 2020. The Fekola mill has the potential to run above the annualized throughput rate of 7.5 Mtpa and analysis is currently underway to determine the optimum throughput rate (for 2021 budgeting purposes the Company has assumed a throughput rate of 7.75 Mtpa). Remobilization of the Fekola solar plant construction group began in mid-September 2020, following a temporary suspension of construction activities in April 2020 due to COVID-19.
  • At Otjikoto, development of the Wolfshag underground mine continues to progress well and on schedule. In the third quarter of 2020, the mining contractor was mobilized, and development of the portal and primary underground ramp has now commenced. Stope ore production is expected to commence in early 2022, in-line with original estimates.
  • At the Gramalote Project, feasibility work continued throughout the year, including the recommencement of drilling on May 11, 2020, with infill resource drilling completed on August 21, 2020. During the fourth quarter of 2020, an updated resource model for Gramalote was completed, providing the information necessary to advance pit design and mining engineering studies. Feasibility stage metallurgical studies and process plant design were completed by year-end and infrastructure design work continues. The results of the Gramalote Feasibility Study are expected to be announced in April 2021, with a construction decision expected to be made shortly thereafter.

Looking forward to 2021, B2Gold remains well positioned for continued strong operational and financial performance. The Company's total gold production is forecast to be between 970,000 - 1,030,000 ounces (including 50,000 - 60,000 ounces attributable ounces projected from Calibre) in 2021, with total consolidated cash operating costs forecast to be between $500 - $540 per ounce and total consolidated AISC forecast to be between $870 - $910 per ounce.

The Company's consolidated gold production from its three operating mines is forecast to be between 920,000 – 970,000 ounces in 2021, with consolidated cash operating costs forecast to be between $480 - $520 per ounce and consolidated AISC forecast to be between $860 - $900 per ounce. The Company's 2021 production guidance does not include the potential upside to increase Fekola's gold production in 2021 from additional mining areas and processing capacity currently being investigated.

The Company's consolidated gold production from its three operating mines is expected to be significantly weighted to the second half of 2021 due to the planned significant waste stripping at both the Fekola and Otjikoto Mines in the first half of 2021 (for Phase 5 and Phase 6 of the Fekola Pit, and Phase 3 of the Wolfshag and Otjikoto Pits). For the first half of 2021, consolidated gold production is expected to be between 365,000 – 385,000 ounces, which is expected to increase significantly to between 555,000 – 585,000 ounces during the second half of 2021 when mining reaches the higher grade portion of Phase 5 of the Fekola Pit and Phase 3 of the Wolfshag Pit. Based mainly on the weighting of production and timing of stripping, consolidated cash operating costs are expected to be between $620 - $660 per ounce in the first half of 2021, before significantly improving to between $380 - $420 per ounce during the second half of 2021. In addition, consolidated AISC are expected to be between $1,040 - $1,080 per ounce in the first half of 2021, before significantly improving to between $745 - $785 per ounce during the second half of 2021.

Based on current operating plans, over a five-year outlook from 2020 to 2024, annual consolidated gold production is forecast to average 950,000 ounces with AISC averaging $825 per ounce.

2020 Full-Year and Fourth Quarter Financial Results

For full-year 2020, consolidated gold revenue was a record $1.79 billion on sales of 1,006,455 ounces at an average price of $1,777 per ounce, compared to $1.16 billion on sales of 827,800 ounces at an average price of $1,396 per ounce in 2019 (excluding revenues from discontinued operations). This significant increase in gold revenue of 55% ($0.63 billion) was 33% attributable to the increase in the average realized gold price and 22% attributable to the increase in gold ounces sold (mainly due to the higher gold production).

For the fourth quarter of 2020, consolidated gold revenue was $480 million on sales of 256,655 ounces at an average price of $1,868 per ounce, compared to $314 million on sales of 211,800 ounces at an average price of $1,481 per ounce in the fourth quarter of 2019 (excluding revenues from discontinued operations). This significant increase in gold revenue of 53% ($166 million) was 32% attributable to the increase in the average realized gold price and 21% attributable to the increase in gold ounces sold (mainly due to the higher gold production).

For full-year 2020, cash flow provided by operating activities was a record $951 million compared to $492 million in 2019. This significant increase of $459 million (93%) reflected the significant increase in gold revenue, as a result of higher realized gold prices and sales. In December 2020, the Company elected to make a voluntary installment prepayment of Fekola income taxes of $50 million. This prepayment will reduce the final installment amount payable due in April 2021 for Fekola's 2020 income taxes by a corresponding amount of $50 million.

For the fourth quarter of 2020, cash flow provided by operating activities was $197 million compared to $145 million in the fourth quarter of 2019, an increase of $52 million (36%) over the fourth quarter of 2019 (and is net of a voluntary tax installment payment of $50 million made in December 2020 related to the Fekola Mine's 2020 tax obligations).

For full-year 2020, the Company generated net income of $672 million compared to $316 million in 2019. In the third quarter of 2020, the Company identified a higher sustained long-term gold price as an indicator of impairment reversal for the Masbate Mine, resulting in a net impairment reversal of $122 million (pre-tax $174 million impairment reversal less $52 million deferred tax expense). Net income attributable to the shareholders of the Company was $628 million ($0.60 per share) compared to $293 million ($0.29 per share) in 2019. Adjusted net income attributable to shareholders of the Company was $515 million ($0.49 per share) compared to $219 million ($0.22 per share) in 2019.

For the fourth quarter of 2020, net income was $174 million compared to $182 million in the fourth quarter of 2019. Net income attributable to the shareholders of the Company was $168 million ($0.16 per share) compared to $177 million ($0.17 per share) in the fourth quarter of 2019. Adjusted net income attributable to shareholders of the Company was $147 million ($0.14 per share) compared to $65 million ($0.06 per share) in the fourth quarter of 2019.

Liquidity and Capital Resources

B2Gold maintains a strong financial position and liquidity. During the third quarter of 2020, the Company fully repaid the outstanding RCF balance of $425 million with the full amount of the $600 million RCF now undrawn and available. In addition, at December 31, 2020, the Company had cash and cash equivalents of $480 million (December 31, 2019 - $141 million) and working capital of $465 million (December 31, 2019 - $242 million).

Due to the Company's strong net positive cash position, strong operating results and the current higher gold price environment, B2Gold's quarterly dividend rate was increased in the third quarter of 2020 by 100% to $0.04 per common share (or an annualized rate of $0.16 per common share), one of the highest dividend yields in the gold sector.

In 2021, the Company expects to generate cashflows from operating activities of approximately $630 million, based on current assumptions including an average gold price of $1,800 per ounce. The Company's 2021 operating cashflows are expected to be lower than 2020, mainly due to lower production, higher cash operating costs and higher cash tax payments including the expected settlement of remaining 2020 income tax liabilities of approximately $90 million (including $75 million for Fekola) in April 2021 and the payment of the 2020 Fekola priority dividend to the State of Mali of approximately $50 million which is due in mid-year 2021.

In 2021, the Company is required to pay Fekola tax installments based on a percentage of 2020's total income tax obligations. Any difference between the actual cash installments paid during the year and the final tax amount owing for 2021 must be settled in the April of the subsequent year, based on Malian tax regulations. In addition, amounts owing for the Fekola 2021 priority dividend (which will be recorded in the income tax line for accounting purposes in the 2021 Consolidated Statement of Operations) must be settled in cash in the second quarter of 2022. The Company is forecasting a current income tax, withholding and other taxes expense of approximately $300 million in 2021 (using a gold price assumption of $1,800 per ounce) and to make total cash income tax payments of approximately $380 million, including $140 million related to the 2020 outstanding income tax obligations and Fekola's 2020 priority dividend obligation discussed above. Based on the estimated Fekola cash tax installments to be paid in 2021, the Company expects any outstanding Fekola tax liability to be accrued at December 31, 2021 to be less than $20 million. The Fekola priority dividend obligation forecast to be accrued in 2021 is approximately $45 million and is expected to be paid in June 2022.

First Quarter 2021 Dividend

On February 23, 2021, B2Gold's Board of Directors declared a cash dividend for the first quarter of 2021 of $0.04 per common share (or an expected $0.16 per share on an annualized basis), payable on March 16, 2021 to shareholders of record as of March 8, 2021.

As part of the long-term strategy to maximize shareholder value, B2Gold expects to declare future quarterly dividends at the same level. This dividend is designated as an “eligible dividend“ for the purposes of the Income Tax Act (Canada). Dividends paid by B2Gold to shareholders outside Canada (non-resident investors) will be subject to Canadian non-resident withholding taxes.

The declaration and payment of future dividends and the amount of any such dividends will be subject to the determination of the Board, in its sole and absolute discretion, taking into account, among other things, economic conditions, business performance, financial condition, growth plans, expected capital requirements, compliance with the B2Golds's constating documents, all applicable laws, including the rules and policies of any applicable stock exchange, as well as any contractual restrictions on such dividends, including any agreements entered into with lenders to the Company, and any other factors that the Board deems appropriate at the relevant time. There can be no assurance that any dividends will be paid at the intended rate or at all in the future.

2020 Operations

Mine-by-mine gold production in the fourth quarter and full-year 2020 (including the Company's approximate 33% share of Calibre's production) was as follows:

Mine

Q4 2020Gold Production(ounces)

Full-Year 2020Gold Production(ounces)

2020Annual GuidanceGold Production (ounces)

Fekola

158,548

622,518

590,000 - 620,000

Masbate

57,566

204,699

200,000 - 210,000

Otjikoto

40,205

168,041

165,000 - 175,000

B2Gold Consolidated (1)

256,319

995,258

955,000 – 1,005,000

Equity interest in Calibre (2)

14,150

45,479

45,000 - 50,000

Total

270,469

1,040,737

1,000,000 – 1,055,000

(1)

“B2Gold Consolidated“ - gold production is presented on a 100% basis, as B2Gold fully consolidates the results of its Fekola, Masbate and Otjikoto mines in its consolidated financial statements (even though it does not own 100% of these operations).

(2)

“Equity interest in Calibre“ - represents the Company's approximate 33% indirect share of the operations of Calibre's El Limon and La Libertad mines in Nicaragua. B2Gold applies the equity method of accounting for its ownership interest in Calibre.

Mine-by-mine cash operating costs per ounce (on a per ounce of gold produced basis) in the fourth quarter and full-year 2020 were as follows (presented on a 100% basis):

Mine

Q4 2020Cash Operating Costs($ per ounce produced)

Full-Year 2020Cash Operating Costs($ per ounce produced)

2020Annual GuidanceCash Operating Costs($ per ounce)

Fekola

$397

$320

$285 - $325

Masbate

$585

$629

$665 - $705

Otjikoto

$520

$453

$480 - $520

B2Gold Consolidated

$458

$406

$395 - $440

Equity interest in Calibre

$734

$792

$720 - $760

Total

$473

$423

$415 - $455

Mine-by-mine cash operating costs per ounce (on a per ounce of gold sold basis) in the fourth quarter and full-year 2020 were as follows (presented on a 100% basis):

Mine

Q4 2020Cash Operating Costs($ per ounce sold)

Full-Year 2020Cash Operating Costs($ per ounce sold)

2020Annual GuidanceCash Operating Costs($ per ounce)

Fekola

$385

$320

$285 - $325

Masbate

$546

$638

$665 - $705

Otjikoto

$501

$437

$480 - $520

B2Gold Consolidated

$446

$405

$395 - $440

Equity interest in Calibre

$738

$796

$720 - $760

Total

$461

$422

$415 - $455

Mine-by-mine AISC (on a per ounce of gold sold basis) in the fourth quarter and full-year 2020 were as follows (presented on a 100% basis):

Mine

Q4 2020AISC($ per ounce sold)

Full-Year 2020AISC($ per ounce sold)

2020Annual GuidanceAISC($ per ounce)

Fekola

$736

$599

$555 - $595

Masbate

$930

$985

$965 - $1,005

Otjikoto

$1,200

$920

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